Methodology for project management control in the construction industry

Scope and method of study. This research was conducted to develop a new approach to evaluate the performance of construction projects. The new approach differs from the current common practice in two main areas. The traditional search for one integrated descriptor for the success or failure of the entire project is replaced by evaluating the performance of selected project components only. Next, a set of ratios analogous to the financial ratios used to appraise businesses were utilized to identify cost items having a potential for financial problems and to determine the monetary impact on the final project cost. A set of control ratios capable of describing the progress conditions of each project's work items was selected. Forecasts and performance indices utilizing the selected ratios were computed by examining the relationships between the actual and budgeted value of the control ratios. A problem detection technique was developed to detect areas in the project having potential financial problems. An algorithm was devised to identify the immediate cause(s) of such problems and to determine their monetary impact on the final project cost. Findings and conclusions. An actual construction project was included in the study as a numerical illustration of and as a guide to the application of the developed problem detection technique. The technique was successful in identifying the cost items having financial problems, determining the causes of such problems, and assessing their monetary impact on the final project cost. This investigation was limited to evaluating and detecting problems due to labor costs, material costs, and extra costs due to low labor productivity.